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SEMINAR: How To Create A Request For Proposal (RFP)
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Course Outline for a 2-Day Course

Why a Request for Proposal is Created

  • Buyers always have a choice to buy competitively or not
  • To minimize costs or to maximize profits
  • Existing contract is expiring
  • It is time for an upgrade
  • Service is expanding
  • Recently the requirement has become important
  • New conditions are imposed
  • Technological changes
  • Other considerations

The RFP as Part of a Complete Process

  • Commonly used terms for procurement documents
  • Request for Bid, Tender
  • Request for Quotation
  • Request for Information
  • Invitation to Negotiate
  • Invitation for Oral Presentation
  • Expression of Interest, Letter of Intent
  • Request for Pre-Qualifying Information
  • Request for Proposal
  • Unsolicited Proposals

Aiming for a Fair and Open Process

  • All buyers require a purchasing process
  • How governments implement guidelines

How Terms and Conditions are Viewed

  • Aiming for predictable behavior
  • End user attitudes about Terms and Conditions (T&C)
  • Purchasing professional's attitude about T&C
  • Government attitude about T&C
  • Vendor's view of the buyer's T&C
  • Current situation
  • A productive attitude about Terms and Conditions
  • Structuring Terms and Conditions in RFP's to optimize the value of proposals

External Identification of RFP's

  • Choosing a descriptive title for the RFP
  • Organization issuing the RFP
  • RFP identification number
  • Date the RFP is issued

Terms and Conditions

  • Terminology used in the document
  • Basic privileges of the buyer
  • Cost of proposal preparation
  • Right to amend or re-issue the RFP
  • How to obtain a copy
  • The requirement for a deposit or bid bond to receive a copy
  • Multiple proposals
  • Where this document fits in the process
  • Synopsis of the Request for Proposal
  • Budget guidelines
  • Proposal validity period
  • Contracting process
  • Limiting the time allowed to negotiate a contract
  • Reserving the right to extend a contract
  • Notification of intent to submit proposal
  • Deadline for questions
  • Proposal submission location and deadline
  • Contact persons
  • Vendor conference
  • How proposal are to be submitted
  • Language of proposal
  • Size of proposals
  • Structure of proposals
  • Laws of jurisdiction
  • Requirement for security clearance
  • Applicable taxes
  • Restrictions on advertising
  • Former employees of buyer organization
  • Vendor presentations
  • Confidentiality
  • Vendors in litigation with buyer
  • Previously convicted vendors
  • Vendors blacklisted due to past performance
  • Buyer-vendor relationship
  • Indemnity
  • Intellectual property
  • Mergers and spin-offs
  • Selection is final
  • Conflict of interest
  • Notification of vendors
  • Notification of back-up vendors
  • Ownership of vendor
  • Requirement for vendor pre-qualification
  • Sub-contracting
  • Requirement for an Executive Summary
  • Requirement for the signature of a responsible person
  • Requirement to be notified of a possible labor stoppage
  • Insurance requirements
  • Protection of workers
  • Errors in a vendor's proposal
  • Schedule of events

Human Resource Requirements in the RFP Creation Process

  • The RFP writing team and how the process gets started
  • The proposal evaluation team

Choosing a Strategy for the RFP

  • RFP's do have strategies
  • Product or Straight-Replacement Strategy
  • Process-Replacement Strategy
  • Objectives or Resulted-Oriented Strategy
  • Problem-to-Solve Strategy
  • View of the strategy at different levels of an organization
  • View of the strategy at different times
  • When the RFP presents more than one strategy

The All-Important Selection Criteria

  • How much information to provide to vendors about selection criteria
  • Aiming for selection criteria that produce acceptable results
  • What to include in the selection criteria
  • Assigning an Importance Index to each characteristic
  • Grading process
  • Grading system for for characteristics or attributes
  • Completing the evaluation chart
  • Determining the weight factors for each class
  • The selection criteria and the buyer's strategy

Sharing Information with Vendors

  • Help vendors help you
  • Product dependencies
  • Procedural issues
  • The human element
  • Political considerations
  • Range of expenditure

Compulsory Requirements

  • What are compulsory requirements
  • Sources of compulsory requirements
  • Types of compulsory requirements
  • Nature of compulsory requirements
  • The value of compulsory requirements in the selection process

Desirable Requirements

  • The role of the desirable requirements in the selection process
  • Understanding why desirable requirements are desirable
  • Using desirable requirements to promote excellence in proposals
  • Vendor costs and buyer's desirable requirements

Cost Considerations

  • Money is always important
  • Lowest cost proposals
  • The two-envelope system
  • Reasonably prices proposals
  • Some popular approaches to balance Quality versus Savings
  • Unclear, vague, or missing financial criteria
  • Short-term versus long-term costs
  • Uncertainty within buyer organization

Buyer-Vendor Communication

  • Establishing contact with a reasonable number of vendors
  • Buyer-vendor relationship during the creation of the RFP
  • While proposals are being prepared
  • While proposals are being evaluated
  • Upon selection of the winning proposal
  • During contract negotiations
  • While the job is being performed

A Methodology to Put it all Together in an RFP

  • Structure of Vendor Proposals
  • Structuring information
  • Organization of Chapters 1,2, and 3
  • Organization of Chapter 4: The Scope of Work
  • Organization of Chapter 5: Vendor Qualification
  • Organization of Chapter 6: Vendor Methodology
  • Organization of Chapter 7: Cost Proposal Guidelines
  • Organization of Chapter 8: Selection Criteria

What is a Statement of Work (SOW)

  • How the SOW got started
  • How it is being used and abused
  • The different stages of the SOW
  • The relationship of the SOW to other documents

What goes into the Statement of Work

  • Factors that determine contents of the SOW
  • The Scope of Work, Terms of Reference
  • Standards, quality, quantity
  • Schedules
  • Processes
  • Cost issues, Remedy clauses
  • Terms for acceptance
  • Vendor methodology, project control mechanism
  • Risks associated with the contents of a SOW

Risks and Consequences of Failure

  • There is no undertaking without risk
  • Living with risk
  • Honest and open recognition of risk
  • Methods of minimizing risk

Scope of Work, or Terms of Reference

  • Starting point
  • Finished product (or service)
  • Deliverables at intermediate stages
  • Requirements
  • Specifications

The Work Schedule

  • Start and finish times
  • Major milestones
  • Partial completion requirements
  • Time estimates for units of work
  • Working with a Pert Chart and the Critical Path

Process-Related Issues

  • Do they matter?
  • Processes and the selection criteria

Standards and Quality

  • Purchase of goods
  • Purchase of services
  • Purchase of construction services

Further Cost and Price Issues

  • Providing hints for acceptable cost
  • Styles of costing
  • Benefits-Driven Procurement
  • Bundled and unbundled pricing
  • Minimum, operational, expanded costs
  • The cost of risk management

Terms for Acceptance

  • How it develops into a problem
  • Identifiable elements
  • Follow-up activities

Vendor Methodology

  • The time to think about project management
  • Implement the project management system fully
  • Project team membership
  • Control and operation of project team
  • Responsibilities of team
  • Conflict resolution mechanism
  • Documentation of project-related activities
  • Past performance requirements
  • Reference checking

Using Risks to Evaluate Proposals

  • The SOW as a proposal evaluation tool
  • Distinguishing between acceptable and unacceptable offers

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